The Hinduja family-backed IndusInd Bank's Board of Directors approved raising up to Rs 30,000 crore through a combination of debt and equity, as well as allowing the promoters to nominate two board directors, in an effort to restore trust in its operations following the recent Rs 2,000 crore accounting lapse.

Through debt securities in any approved manner on a private placement basis, or the equivalent amount in approved foreign currencies, the lender hopes to raise Rs 20,000 crore. Additionally, it will raise Rs 10,000 crore by issuing securities, such as Qualified Institutional Placement, Global Depository Receipts, and American Depository Receipts.

Key Highlights

• IndusInd plans ₹30,000 crore raise—₹20,000 cr debt via private placement, ₹10,000 cr equity issuance.
• Move follows $230 million misaccounting loss and CEO exit; aims to strengthen capital and boost confidence. 

The bank announced that, with RBI approval, it will change its articles of association to allow the Hinduja family, its promoters, to designate two non-executive, non-independent directors to the bank's board.

Despite not having any prior representation, the Hinduja family, who are based in the UK, are now able to propose up to two directors to IndusInd's board.

Earlier this year, IndusInd Bank disclosed accounting irregularities in its derivatives portfolio. The bank hired external agencies to assess the financial impact, which was later revealed to be around Rs 2,000 crore, and to determine the root cause of the accounting errors. The bank's net worth plummeted as the misaccounting of internal derivative trades was exposed.

Sumath Kathpalia, the bank's CEO, resigned in April, accepting moral responsibility for the lapses, just a day after its former deputy CEO, Arun Khurana, left.

For the January–March period, the Mumbai-based private lender reported a net loss of Rs 2,328 crore, citing stress in the microfinance portfolio and accounting problems that affected the balance sheet.

Core income, or Net Interest Income (NII), for IndusInd dropped 43.4 percent to Rs 3,048 crore from the same quarter the previous year.

Also Read: SEBI Probes IndusInd Bank's Senior Management for Serious Violations

With net non-performing assets (NPAs) for the quarter at 0.95 percent, up from 0.68 percent the previous quarter, and gross non-performing assets (NPAs) increasing to 3.13 percent of total loans from 2.25 percent in the previous October-December quarter, the bank's asset quality declined sequentially.